Installing new timing chain on a 318, questioning the oil slinger

Yes, that's installed correctly. Once the balancer is installed, the balancer snout will back up right against the oil shield.
Agreed- that oil shield gets tightly sandwiched between the harmonic balancer and the crank gear; there'll be no flopping around, it ain't goin' nowhere!
And don't omit it- if you've got it, run it.

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I never considered that! 58 years old, and worked on more than a few engines in my day, but I just learned something new.

Thank you!

Older engines used to have a large, felt washer installed there.

I guess that explains the large felt washer in the Fel-Pro TC gasket set I bought. I was scratching my head a bit on that one....

Thank you!